Friday, February 29, 2008
Comment of the Month
From the TED thread:
"...Have you read the book Homo Sacer by Giorgio Agamben, an Italian philosopher? (I just finished it). While I find his style irritating and repetitive, I think he provides some deep thinking that supports your thesis here.
He writes about biopolitics (following Arendt and Foucault) but takes it further than them, identifying the root of Western political practice and its result, which he calls "the camp". (Read concentration camp, refugee camp, etc.)
Homo sacer (the sacred man) lives bare (naked) life - outside law, yet still in relation to it as exception. They are always in relation to a power that no longer recognizes them as having agency. They are men who can be killed without it being homicide, but cannot be sacrificed.
"In the final analysis...humanitarian organizations...can only grasp human life in the figure of bare or sacred life, and therefore, despite themselves, maintain a secret solidarity with the very powers they ought to fight." (133)
"...the camp is the new, hidden regulator of the inscription of life in the order--or, rather, the sign of the system's inability to function without being transformed into lethal machine." (175)
The book and its ideas require a great deal of thought, but when I read your post about TED it immediately resonated. In this reading, TED doesn't address biopolitical issues, and is, in fact, in a compliance with the very system that causes the problems to begin with.
This doesn't necessarily make TED a bad thing. Raising awareness of issues is helpful. And yet, it will get nowhere in creating real change, which requires an entirely new political system (acc. to Agamben).
Personally, I am not entirely sure where I stand yet on Agamben's ideas; I need to think and read more. But I thought I'd offer up the source, as I think it might help your argument."
Bolding's mine. An absolutely killer comment - reread it.
The bolded stuff has a deep resonance with one of the reasons why the DNA of the corporation (conferences, etc, etc) is in decay. It recognizes no agency but that of the boardroom.
In a world where the costs of doing business as usual are being revealed as well, the destruction of the world; in a world where power is shifting to connected consumers - these kinds of institutions are is in almost total decay.
Hey, Elizabeth - thanks. That was kind of awesome.
The Economics of the Macropocalypse
Sometimes, econ can be like crack. Look at a few numbers - hey, all's well with the world.
But it's not the numbers that matter. It's the relationships between the numbers that matter.
The Economist, for example, says:
"There is no denying that for some middle-class Americans, the past few years have indeed been a struggle. What is missing from Mr Obama's speeches is any hint that this is not the whole story: that globalisation brings down prices and increases consumer choice; that unemployment is low by historical standards; that American companies are still the world's most dynamic and creative; and that Americans still, on the whole, live lives of astonishing affluence."
This is yesterday's orthodox argument. And most serious economists take this story less and less seriously.
Why not? Because...ummm...the global economy is in a state of shock. If this story was true, we wouldn't be melting down.
A much more plausible story is this - one that forward-thinking economists are beginning to take very, very seriously.
Real wages have stagnated for decades. But corporate profits are at their highest. That means the net effect of global price competition is just to transfer wealth from the poorest to the richest.
China's exchange rate manipulation has flooded the US with artificially cheap goods. The real price of those goods is the ongoing implosion of the dollar, which, combined with the lack of growth in real wages, is, for most of the country, like being punched in the face - and then kicked in the gut.
Oh yeah - the other price of accepting China's gaming of exchange rates is a country of underemployment and gray market pseudo-employment.
Hey - welcome to your new McJob! We don't give a damn about you, we won't help you learn any productive skills - we just want to use you and throw you away. We all lose in the end, because innovation and productivity die, but at least we win for now (sucker).
Unemployment is also low because it's become chronic, and so a huge number of unemployed aren't counted at all - they've become invisible. We can only measure many of these guys indirectly - ie, 1% of the population spends time in prison, and is effectively excluded from making a productive contribution to the economy.
And that's not even getting into Chinese social costs - which is basically massive underinvestment in any kind of basic institution necessary for a nice life.
Meanwhile, because we've been loooking at superficial numbers that don't mean much - CPI, for example - while ignoring the obvious fact that exploding global demand is going to spike asset and commodity prices to levels never actually seen before.
The flipside of looking at superficial numbers is that we've been fooled by the boardroom into thinking that profit is a number that's economically meaningful. It 's not. And that means we're going to have to spend years trying to make sense of, well, the entire edifice of business of itself: another massive set of costs that we will all have to jointly bear.
That's mostly why America rarely still launches the world's most dynamic and interesting companies - it's just that many of the world's most interesting companies still choose to list in the States.
Ok. Deep breath. What does all that mean?
The economic equivalent of Freddy Krueger standing in the shadows: stagflation. It's just a word to many of you - but from an economic point of view, stagflation is a diagnosis just one step shy of terminal disease.
The Street has (finally) cottoned on to it now, we've been talking about it for months, it's almost inevitable at this point.
And it will probably feed back to our biggest creditor, China, probably cause them to revalue their currency, since their economy will break anyways - and then the real fireworks will begin.
Etsy/Google post - sorry guys. It's a longer post, and I've barely had time to breathe this week. Hopefully in the next few days.
The New Sources of Advantage
Interestingly, Fred talks about conviction as a trait that makes a great investor.
I think there's a deeper lesson. A deeply felt sense of conviction is something that makes a great company.
Unfortunately, it's something most companies, as they've become corpocracies, have lost. Most companies have nothing - nothing - they won't sell out.
In fact, being "corporate" has meant, for the last hundred years, exactly that: the willingness to compromise your conviction for cash.
That's nothing short of insane: it's a totalitarian kind of economic nihilism.
And so is it really any surprise that we're discovering that this kind of defective DNA creates little real, durable value?
In the edgeconomy, the game is very different. Anyone can sell out like that - in the blink of an eye. It's the ability to do the opposite that's a very real source of advantage.
Something we'll be discussing in detail at my HBS blog soonish.
Thursday, February 28, 2008
With Friends Like This...
RWW guys - thanks for the discussion, kind of.
It's funny. Do you think there's a tiny contradiction in saying I'm "out there" - and then spending thousands of words discussing exactly the topic I raised?
Maybe it was the right question, and maybe what I'm talking about isn't very "out there" at all.
Anyways, Bernard's discussion is kind of fun. You guys should check it out.
The Long Tail of Gigantic Companies
So, there's an assumption floating around the b-sphere as a result of the Etsy discussion we kicked off that's a bit off the mark.
Here's how the 37Signals guys put it:
"...The true giants, like IBM, Microsoft, and Google, come to life so rarely that the chances of random company X being one of them is slim to the point that we might as well try to guess who’s going to be struck by lightning tomorrow or win the lottery."
In fact, it's the opposite.
Edgeconomy = turbulence + hypercompetition.
Turbulence + hypercompetition = lots of revolutionaries, lots of upsets, lots of volatility.
Lots of volatility = lots of new giants.
You can look at the numbers (hi, macro crisis). Or you can just look around. Where are they? Everywhere - literally. Mittal, Zara, Baidu, Embraer, etc, etc...
So nextism, if you like, is kind of important. Because it lets us understand what these guys have in common - if anything - that yesterday's incumbents don't.
Put another way, if you're trying to create new stuff, nextism is dangerous - it stops creative thinking. But if you're trying to understand stuff, nextism is an essential component of analysis.
So, let me be a bit more blunt than I'd like to be. Do conferences like TED do more harm than good?
It's not just the fact that TED is just a wee bit pretentious.
The problem is simple. The underlying assumption is that we can help solve the world's big problems by putting a bunch of interesting people in a room and talking about stuff.
In fact, exactly the opposite is true. The way we can solve the world's problems by involving the people who are suffering as an essential part of a living, evolving solution.
By making them part of the DNA.
That's not an argument: it's an economic fact. It's why guys like Muhammad Yunus change the world and win Nobel Prizes.
So TED - I think, just maybe, that what you're doing is even more damaging than mere elitism.
You're putting forth a new colonialism for the 21st century, a strange hybrid of techno-neo-hippie-colonialism.
But you've left out the most vital parts of those philosophies; the premises of your thinking are still the same: we're better than you, we can solve your problems, let us help you (instead of involve you).
Economic history, of course, has been a harsh judge of this approach. We know how it ends up: creating even more misery than went before. It's helping societies build the right DNA that fuels growth.
And that's exactly why, though TED is sexy, it's also kind of intellectually bankrupt: it's actively helping stop new DNA from happening.
Let me put it even more sharply. There have been gatherings like TED for hundreds of years. But the vast majority of the world continues to live in bone-crushing poverty, misery, and fear.
Think about that for a second.
That's an existence proof the size of the Milky Way that stuff like TED isn't part of the answer - it's part of the problem. It's a negative equilibrium: all that great thinking is directed to the place where it's least productive.
NB - Guys, I'm enjoying the debate, but note that I am not "bashing" TED. Nor do I think it's just wankery. I enjoy watching the talks. But I'm not sure it does more good than harm.
Let me put it another way. Conferences are one way to organize and manage stuff - a kind of DNA.
When the stakes are low - a conference for media deal-making or something - that's fine.
But when you get lots of brilliant people in one room, surely there's a way to organize it so more value is created than just lots of interesting talks. Surely there's a way to amplify the productivity of conferences like TED - because right now, it ain't too high.
Yes, there are pros to TED. But we have to measure more than pros and cons: we have to think about opportunity cost as well. That's what I mean by least productive.
The problem is that the very people whose problems desperately need solving the most - are always excluded by the DNA of orthodox conferences.
Monday, February 25, 2008
Hey guys, I had a special request for a Next Weds tomorrow (Tuesday) night.
So, if you're around and interested, let's get together at Detroit on Earlham St in Covent Garden from 8pm.
Since I don't have a life, we will do both nights this week.
Thursday, February 21, 2008
Is Etsy the Next Google?
So let's discuss a topic people seem to be quite interested in.
Is Etsy the next Google?
I think it just might be.
I'll save the reasons for tomorrow - suffice it to say that the amount of value Etsy can potentially unlock is absolutely world-changing. Those of you who've followed bubblegen for a while know it's been my favorite play for a very, very long time.
Just like Goog solved a Very Big Problem, so can Etsy...I'm just not sure the Etsy kru fully sees it yet. But then, neither did Google, from 1997-2002.
For now, fire away and let everyone know what you think.
Guys, if this post makes you angry, take a deep breath, ask someone for a hug, and chill out. There are way (way) more important things to get emotional about.
Here's Kottke, for example, spectacularly missing the point.
Kottke kind of absurdly suggests that there been only three revolutionary companies since 1960 anyways, so comparing Etsy to Google is meaningless. Actually, there have been hundreds of revolutonaries. Starbucks, LVMH, H&M, MySQL...the list is enormous, and the value of the Dow/Nasdaq/etc vs something like the Ghana Stock Exchange Index confirms it.
Why so much heat/irrationality? Because I think a lot of you, like Kottke, are either new to bubblegen, and/or aren't actually seriously reading the post.
I'm not telling you Etsy is 100% for sure going to achieve Google's revenues 2 years from now. That's a superficial, not a serious, discussion; that's not what we discuss here.
Rather, I'm pointing out that Etsy has the potential to be as revolutionary as Google in terms of DNA, and that new DNA might just let it solve a Very Big Problem. That's the deeper discussion we are gonna have shortly.
It's economic causes - not finanical outcomes - that we want to discuss.
Thanks for all the comments so far, I think a couple of them have come kind of close.
2008 + The TechCrunch Effect
Mike A has mirrored this post anyways (with a few comments of his own, worth reading), so here it is again, esp for all of you who asked to see it.
Let me add something before it kicks off.
First, take a deep breath and relax. If you're here just to rubberneck, it's lame, and you should leave.
That said, I pulled it for two reasons.
First, because it was turning into a bit of a pissing match (with people I know and like, no less). That's distinctly not the point of Bubblegen - if people don't want to be discussed, it's their prerogative not to be.
Second, because the cost of criticizing TC is taking on the larger TC machine, now and in the future. You get almost instantly tag-teamed by several people at once - guys who can spend all day blogging about you and your post, no less.
It's not just a pain. I think that's fundamentally unfair. It's not a game that's worth playing. What should be debate feels suddenly more like minor-league intimidation.
Maybe that's why it feels like, as several commenters point out, there's an elephant glaring at everyone from the middle of the room; an elephant with a keen ear and a short fuse, whom everyone is afraid to look at, for fear of getting stomped.
Anyways, blah, blah, blah, here's the original post, enjoy (or not).
Admit it. You're getting just a wee bit tired of TechCrunch. Erick's posts are usually pretty cool, and TC UK is interesting. But otherwise...between Mike, Duncan, etc, it's a bit like mistakenly walking into a room filled with screaming harpies.
I'm gonna make a prediction. TechCrunch (etc) are peaking. Without investing in the community - instead of just endlessly playing the community against itself - further growth (real growth, not just beta) is going to be more and more costly.
I'm gonna call this set of dynamics the TechCrunch Effect. It's the opposite of building a community. Instead of making a set of people with similar interests better off, you wedge them and divide them.
Yes, you can get attention that way - by tapping the dynamics of competition. No, you can't sustain it - because the returns to competition are dominated by the returns to cooperation in a world where anyone can compete.
2007 was the year of networks. 2008 is going to be the year of communities.
If we're lucky, Etsy is gonna start emerging as the next Google. Microcommunities are going to explode. Etc. Why? Because at the edge, love is more powerful than hate - a lot more powerful.
NB - Mike B has a nice and funny response here, which you should read.
I have a feeling I'm gonna take maaajor heat for this post, so let me leave you with three thoughts.
1) When I say love in the context of communities, I don't mean just giving good reviews. I mean managing the community so everyone's better off, not arguing all the time.
2) If you wanna comment, no flames for either side please. Bubblegen and TC aren't competitors, there's no need for anyone to feel threatened, so let's focus on constructive criticism.
3) Yes, of course, I could just be wrong.
DNA and The Obama Endgame
Lots of interesting comments on the Obama Endgame post.
Let's talk for a sec about political DNA. A couple of people have pointed out that the prez - technically, at least - can't change the political DNA of Washington. That is, the DNA is hardcoded into the constitution.
I'm not so sure. Bush has radically changed Washington's DNA. True, he's subverted the constitution in many ways.
But if you look a little more closely, much of the DNA also lies outside the constitutionally ordained megastructure. Two parties, caucuses/primaries, funding rules, committee-led decision-making, how elected officials staff their offices, how the prez, ultimately, can softly restructure the rest of government via appointees, etc.
What do you guys think? It's funny - but the most intuitive example of DNA I think we can discuss ain't business, it's politics.
The Neverending Lameness of the Venturescape, Pt 28881
Ashkan has a long and interesting post about why most ad-supported startups will fail, but venture guys don't get it.
I think there's a simpler way to put it. Most ad-supported startups will fail simply because 1) ads suck, and destroy value, but 2) they're not creating new value by making said ads any better.
In fact, the less they all focus on making ads better, the worse each of these players is, because the mediascape just gets more polluted.
It's a classic example of a negative equilibrium.
How did we get here? Most venture guys, unfortunately, being almost as myopic as analysts, are more interested in revenue (yeah!! high-five!!!) than on creating real, durable, sustainable value by making ads that don't suck.
There's a universe of difference between the two. Think Facebook vs Google.
So: 1) lots of lame startups serving tons of crappy ads, soon to be followed by 2) lots of dead startups no longer polluting the mediascape with tons of crappy ads.
Macropocalypse, Special Welcome To Edition
oh hai. i'm stagflation. i'm in ur economy eatin ur growth.
Wednesday, February 20, 2008
The Obama Endgame
So. At last like the ten get-togethers I've been to, the big question has been the same: (when) will Barack Obama be assassinated?
Yes, it's an awful thing to discuss. But the argument's as simple as it is compelling (and admit it, you've discussed it lately too :)
At this point, his momentum is unstoppable. But he's as unstoppable as he is dangerous - to every vested interest in the universe, from lobbyists, to dictators, to corpocracies.
As Daniel Noriega recently said - Obama is leading what's essentially a revolutionary movement.
And that, for my money, makes assassination a distinctly likely event - from a strategic pov, more likely, in fact, than an Obama presidency.
If only there was an Intrade contract...
Now, please don't misread this to mean I want to see Obama get offed. Far from it - I think he's the closest thing we're ever gonna get to JFK meets MLK.
The parallels are striking. Those were the last two guys who wanted to revolutionize the country's DNA - who threatened multiple vested interests at once. And we know how - what a coincidence - both their stories tragically ended.
Monday, February 18, 2008
The Fourth Horseman of the Macropocalypse
What do Zimbabwe, the UK, and the USA have in common?
As it turns out, quite a bit - at least when it comes to broken DNA.
In Zimbabwe, it looks like this: a cadre of government thugs, eating what little fat is left on the bones of the country's decaying agricultural and industrial asset base.
In the UK and US, it looks like this: bankers cashing in million-dollar cash bonuses at the Ferrari dealership, while their deals go down in flames - and you foot the bill.
See the similarity yet? The underlying economic principle is exactly the same: without mincing words, it's theft; a transfer of wealth from the poorest to the richest.
Look. We can apply all sorts of rocket science to analyze this. And we will, at my HBS blog, in relatively short order.
But the reality is simple. It's not just that the guys who perpetuated the macropocalypse are laughing all the way to the bank. It's that if you don't know who the sucker is yet - that's because it's you. You are the pawn in this game.
Whether it's Bernanke slashing and burning the economy to a devaluation of Third World proportions, or Gordon Brown nationalizing the very real costs of greed and fear, the problem is the same: the DNA of the financial system is in near-total decay.
Economies that are run this way - to transfer value from poor to rich, rather than create value - end up in a single, bad, equilibrium: stagflation/hyperinflation.
Think Japan, or better yet, Zimbabwe.
Why? Think about it. In such an economy, the incentive for investment dies. And that kills any further productivity/efficiency/etc gains. And so the economy begins going into reverse, eating itself from the inside out.
So here - as plain as a sunny June day - is the fourth horseman of the macro crisis: instead of organizing and managing the financial system for value creation, the pliance and complicity of governing bodies in organizing and managing it so wealth is transferred from those who need it most, to those who need it least (and who are willing to abuse it most).
That sounds hyperbolic. Unfortunately, it's not a joke. It's an economic disgrace.
In fact, more than that - it's an economic act of violence: theft.
Edge Principles: Love > Fear
Found an interesting reponse to one of my points here -
tja, true love is hard to find but definitely out there (apple, threadless, netflix, krispy kreme)
Let's rewind and understand the relationship between love and ads: it's strongly negative. When consumers really do love stuff, those brands have to advertise less.
Why? Simple: because love isn't built by carpet-bombing people with costly ads.
On a deeper leve - as Threadless demonstrates - it's not the "brand" consumers love; and when people love stuff, they stop being "consumers".
We need a whole new vocabulary for these new dynamics.
But the point is: don't miss the forest for the trees. Yes, there are a handful of companies people love. But from an economic pov, those are the almost always guys that invest the least in advertising. They earn that love in more strategically meaningful ways.
The New Economics of Brands
Hi folks. This week at my HBS blog we're discussing the new economics of brands - as an example of how traditional sources of advantage are failing - in text and in video.
I've noted several examples of branding plays gone wrong here on Bubblegen (you know who they are) - but I haven't discussed the economics of brands, why brands are decaying, or what next-gen branding will look and feel like.
So if you're interested in a deep dive on brands, economics, and advantage, check it out. It was a fun post to write.
And, as always, please leave a comment there to let me know how you guys are enjoying the community/discussion/etc - I will try and get a video response going when you do.
I don't know about you guys, but I'm jonesing for a Next Wednesday.
So let's get together this week. Same place as last time - Detroit Bar, Earlham St, Covent Garden, Wednesday night from 7pm onwards.
There's tons to discuss - if you wanna suggest a specific topic, comment away, email me, etc.
All are welcome, bring a friend, if you're really unlucky, I might shoot a video of you for my HBS blog.
Thursday, February 14, 2008
Hi folks - if you've never had the chance to hear me geek out in person, and you wanna do so, spend a sec to check out the video comment responses we're doing at my HBS blog.
I got a very interesting comment, and uploaded a longish video clip in response, discussing the changing nature of advantage.
It really does help bring the conversation to life.
I'm gonna try and do these regularly, so if you're interested, comment away there (unless it's about my incredibly nerdy sweater :)
Tuesday, February 05, 2008
Let me take a few minutes to discuss some fairly significant changes to Bubblegen.
First, I am going to be creating a new kind of research institute: the Havas Media Lab.
Second, as some of you might have noticed, I am a discussion leader/blogger at HarvardBusiness.org, to help frame and introduce many of the ideas in my forthcoming book.
Let's take these one at a time.
Regarding the Media Lab, I've been working with the team involved for quite a while. They rock, and we all have a deeply felt interest in reinventing media, marketing, and brands.
The Lab happened because I don't think any of the standard models - venture funds, corporates, firms, etc - can really make it happen (or else it would be happening).
Hence, the need for a new kind of entity, which is focused on driving new ideas - but also focused on igniting experimentation and discovery.
I've talked to many of you about the Lab already. I'll be discussing the goals of the Lab both here and at the Lab's (currently nonexistent :) blog in depth over the coming weeks.
Next. As a discussion leader at HarvardBusiness.org, I'm gonna discuss big-picture issues about how strategy and advantage are evolving. The team at HBS Digital have assembled a group of some of the world's most serious business thinkers as discussion leaders, and it's a privilege to be added to that list.
I used to post a lot about bigger picture stuff at Bubblegen. But some of you have noticed that I've been holding back discussing exactly that here at Bubblegen for a while - now you know why.
So if you're interested, hit my HBS blog. The first post is a deeper discussion of something we've been talking a lot about here - DNA.
If you're a Bubblegen regular, let me know what you think by leaving a comment there - I could use the feedback, to help me understand how you guys can be members of both communities.
What does this mean for Bubblegen/advisory? I will continue to work with a small number of clients on advisory work, but the Lab's goal isn't strictly to be a consultancy.
What does that mean for Bubblegen/blog? Bubblegen is going to live on in much the same way it does now, discussing stuff in excruciating detail with lots of tedious jargon, just with a bit less frequency :)
I'm excited by all of this - and I hope you are too.
Monday, February 04, 2008
Edge Principles: Advantage is in the DNA, Yahoo + Microsoft Edition
So I've got a lot of comments and emails basically saying that you guys think that when I argue DNA will prevent Microsoft + Yahoo from creating value, I mean "culture".
That's inaccurate, so let me be (a lot) more precise - and skip to the end of this post if you've heard this part before.
DNA is how we organize production and consumption.
Corpocracies have a specific DNA: vertical integration, elaborate hierarchy, and lots of cronyism.
Open source communities have another: no bosses, always-on negotiation, and open but deeply interdependent production.
So let's try and recast the Yahoo + MS argument.
The point isn't culture. Rather, it's that Yahoo and MS are - and will be jointly even more so - unable to shift from core to edge leverage.
Consider the simple fact that despite a decade of countless billions spent trying, neither one has built a market, network, or community that ever really worked.
Why? Because they're already organized on a dying industrial paradigm. Yahoo is the ultimate siloed organization, where bureaucracy and fragmentation stifle radical innovation - perhaps the ultimate source of it's paralysis.
See the point? DNA is about how we manage - how we organize and manage production and consumption.
Google's Achilles heel is communities - but it's competence in assembling markets and networks is absolutely unparalleled. Again, the cause is DNA: Google manages consumption and production in radically different ways than almost anyone else in the economy, save Craigslist.
Google has a genetic makeup that lets it leverage the edge almost reflexively - but Microsoft and Yahoo have a genetic makeup that already organize production and consumption in a very specific way: according to the dying logic of an industrial massconomy.
Now, how does this affect strategy?
All the things everyone's ascribing to this deal - scale, etc - those are yesterday's sources of advantage.
The power of Google's DNA is that it lets Google tap entirely new sources of advantage.
A simple example. Even if Yahoo + MS combined had a larger market share than Google, who would be more likely to redefine brands? Of course - Google - because experimentation is hardwired into it's nervous system. The value of scale is constrained by DNA.
That's the point: in the edgeconomy, advantage is in the DNA.
Let's reverse that. Conversely, new DNA is yielding radically new sources of advantage, which dominate the network logic of a massconomy - and utterly eviscerate yesterday's sources of advantage, which are slowly dying in the ashes of the massconomy.
Friday, February 01, 2008
Victim of the Crime
You know, it's not often that we get to witness fatal errors. Strategic errors, sure.
But bona fide fatal - company-killing, firm-vaporizing errors - errors? Almost never - they're the strategic equivalent of meteor strikes.
Lucky us for, the heavens are raining fire today.
I hate to be so blunt, but I'm short of time today, so let me offer a guess: Yahoo + Microsoft isn't just a mistake - it's a double suicide; a fatal error.
Why? Neither company has the DNA to take on Google (let alone the massive number of startups waiting in the wings). Sure, they might collectively have the resources.
But DNA will always constrain YahooSoft from utilizing those resources in ways that create value.
Think Hotmail --> Yahoo Mail writ large. Think delicious --> nowhere. Think Microsoft hardball vs Google softball. Think of the near-total paralysis and groupthink in a YahooSoft boardroom.
The Street is thinking about this nascent industry in terms of "market share". That's shorthand for: "we have no real insight into competitive dynamics".
Competition in this space is - and has been - about edge competencies, redefining brands, and reshaping consumption.
Now look a bit further out. Microsoft is gonna blow it's entire cash pile on this deal.
That's not just a strategic error: it's going to be a fatal error.
Why? Combining bad DNA with bad doesn't yield good. It yields worse.
The challenge facing the media industry - the reason Google blew it's quarter - is to reinvent branding.
Do you think YahooSoft - a combined entity with even less empathy for connected consumption than each alone - really has any hope of doing so?
Not a chance.
I think - for what it's worth - that this is the end of Yahoo as we know it. Fine - the real Yahoo, sadly, suffocated a long time ago.
The real point is: this is the end of Microsoft as we know it. Yes, I know, finally, isn't it nice, etc - more to the point: the endgame will be to leave Google more firmly in the driver's seat than ever before.